Bipartisan lawmakers push for IRS answers on problems facing taxpayers

A group of bipartisan lawmakers is pressing the IRS for answers on lingering issues amid a backlog of millions of unprocessed returns.

Sens. Bob Menendez, D-N.J., and Bill Cassidy, R-La., members of the Senate Finance Committee overseeing the IRS, alongside Reps. Jimmy Panetta, D-Calif.; Abigail Spanberger, D-Va.; Brian Higgins, D-N.Y.; Gus Bilirakis, R-Fla.; and Mike Kelly, R-Pa., reiterated ongoing concerns and pushed for relief in letters to IRS Commissioner Charles Rettig.

“We remain concerned that the IRS does not have a comprehensive plan to remedy the numerous problems affecting taxpayers, despite the fact that this filing season is already well underway,” the lawmakers wrote.

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“For example, there is continued confusion about which notices may be unilaterally suspended by the IRS, beyond the notices the IRS has already suspended, among other issues,” they said.

The lawmakers want to know which notices must be issued within a certain timeframe by law, and why others still haven’t been suspended. The agency in February temporarily halted more than a dozen types of automated letters, including some for unpaid taxes. 

They have also asked for clarification on the process for penalty abatement, including for taxpayers who already received relief in 2020 and 2021, asking for an IRS response by the close of business on March 14.

The IRS did not immediately respond to CNBC’s request for comment.

The letters come as the IRS plans to hire 10,000 workers, with 5,000 new employees in the next few months, to tackle a backlog of more than 20 million unprocessed returns. While the influx isn’t likely to help before the April 18 filing deadline, it may provide a boost through the rest of the year.

Congress has approved $12.6 billion for the agency’s 2022 budget, a 6% increase from 2021, as part of the $1.5 trillion omnibus spending package, focused on taxpayer service. Last year, President Joe Biden requested $80 billion over the next decade to combat tax evasion from wealthy Americans.

The letters have support from the Association of International Certified Professional Accountants, Padgett Business Services, National Association of Enrolled Agents and National Association of Tax Professionals, among others.

“Since the beginning of tax season, the AICPA, members of Congress and various organizations representing taxpayers and practitioners have urged the IRS to take significant and meaningful steps to mitigate the anticipated challenges of this tax season,” AICPA President and CEO Barry Melancon said in a statement. 

“The tax season is well underway, and we hope the IRS will heed the widespread calls for meaningful relief and take the necessary steps to ease taxpayers’ burden and frustration,” he said.